Me­di­aTek profit hits nine-quar­ter low

The China Post - - TAIWAN BUSINESS -

Me­di­aTek Inc. ( ), one of Tai­wan’s lead­ing in­te­grated cir­cuit de­sign­ers, saw its net profit for the sec­ond quar­ter of this year fall­ing to a nine-quar­ter low due to the slow sea­son ef­fect.

In an in­vestor con­fer­ence held Fri­day, Me­di­aTek re­ported NT$ 6.38 bil­lion ( US$ 203 mil­lion) in net profit in the sec­ond quar­ter, down 12.1 per­cent from a quar­ter ear­lier, with earn­ings per share of NT$4.06, com­pared with NT$4.62 recorded in the first quar­ter.

Mar­ket an­a­lysts said that dur­ing a prod­uct tran­si­tion pe­riod, which slowed de­mand in the sec­ond quar­ter, Me­di­aTek’s con­sol­i­dated sales for the AprilJune pe­riod fell 1 per­cent from a quar­ter ear­lier to US$47.04 bil­lion. Even worse, the an­a­lysts said, price com­pe­ti­tion has hurt the IC de­signer’s gross mar­gin, which fell 1.4 per­cent­age points to 45.9 per­cent.

Look­ing ahead, Me­di­aTek Vice Chair­man and Pres­i­dent Hsieh Ching-jiang said the com­pany is ex­pected to feel the pinch of the weaker-than-ex­pected global de­mand in the third quar­ter.

Hsieh said that fierce com­pe­ti­tion in the global hand­held de­vice mar­ket could fur­ther com­pro­mise the IC de­signer’s chip ship­ments in the July-Septem­ber pe­riod.

The Me­di­aTek ex­ec­u­tive said that the IC de­signer’s con­sol­i­dated sales could range be­tween NT$ 51.7 bil­lion and NT$ 55.5 bil­lion, up 10-18 per­cent from a quar­ter ear­lier. The forecast was about 20 per­cent lower than mar­ket ex­pec­ta­tions.

Hsieh said that Me­di­aTek’s gross mar­gin for the third quar­ter is ex­pected to range be­tween 42.5 per­cent and 45.5 per­cent.

With Me­di­atek be­com­ing more cau­tious about the global mar­ket cli­mate, Hsieh said that the IC de­signer’s con­sol­i­dated sales for the whole of 2015 are ex­pected to fall 5-10 per­cent from a year ear­lier, adding that its gross mar­gin is ex­pected to face fur­ther risks in the sec­ond half of this year.

Hsieh said that Me­di­aTek has low­ered its forecast for 2015’s smart­phone chip ship­ments to 400 mil­lion units from a pre­vi­ous es­ti­mate of 450 mil­lion units, while also cut­ting its es­ti­mate for chips used in tablet com­put­ers by 10 per­cent to 45 mil­lion units for this year.

He said that Me­di­aTek is ex­pected to ship a to­tal of 150 mil­lion long term evo­lu­tion (LTE) chips this year to take a 20 per­cent share of the global LTE chip mar­ket.

In terms of its ef­forts in ad­vanced tech­nol­ogy de­vel­op­ment, Hsieh said, Me­di­aTek is sched­uled to launch com­mer­cial pro­duc­tion of chips made on the 20 nanome­ter process at the end of this year, and to kick off mass pro­duc­tion of chips made on the 16nm process in the first half of next year.

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